SPP proposes Western Energy Imbalance Service Market to bring cost savings and grid modernization to the west

LITTLE ROCK, Ark. — Southwest Power Pool (SPP) has announced to western utilities its proposal for the Western Energy Imbalance Service market (WEIS) it intends to launch in December 2020. The wholesale electricity market will balance generation and load regionally and in real time. SPP’s previous energy imbalance market went live in 2007 and provided participants with $103 million in benefits in its first year of operation.

SPP will administer the WEIS on a contract basis, meaning utilities do not have to be a member of the SPP regional transmission organization (RTO) to participate. The market will centrally dispatch energy from participating resources throughout the region every five minutes, enhancing both the reliability and affordability of electricity delivery from utilities to their customers.

As the market’s administrator, SPP will maintain reliability of the region’s transmission system and meet demand with the most cost-effective generation available, reducing wholesale electricity costs for participants. Like SPP’s previous markets, the WEIS will provide price transparency of wholesale energy, allow parties to trade bilaterally and hedge against costly transmission congestion.

In designing the WEIS, SPP leveraged existing constructs in the west and its experience successfully building and operating its own energy imbalance market from 2007-2014, after which the RTO introduced day-ahead unit commitment and other services in the transition to its current Integrated Marketplace.

“SPP knows markets,” said Bruce Rew, SPP vice president of operations. “In the case of both our original imbalance market and its successor, the Integrated Marketplace, we designed, built and operated wholesale energy markets that far exceeded participants’ expectations. Without exception, SPP-administered markets have proven to be wise investments that paved the way for tremendous benefits in terms of reliability, integration of diverse generating fleets including large amounts of renewable resources, and overall modernization of the bulk power system.”

SPP is committed to the long-term success of a western market. It plans to operate the WEIS under a Western Joint Dispatch Agreement that, among other things, guarantees participants a say in the market’s ongoing evolution.

“We’re a stakeholder-driven organization that believes in the power of partnership,” said Nick Brown, SPP president and chief executive officer. “We want to do more than just launch a wholesale electricity market in the west. We want to work with utilities to understand the challenges they face and develop smart solutions that benefit the whole region. That’s how we operate as an RTO, and it’s how we plan to administer this and other contract services in the west.”

“The scope of our services and responsibilities continue to evolve, but our values and commitment to serving customers have remained the same,” Brown said. “We believe in doing the right thing for the right reason in the right way, and we’re confident the WEIS represents just such an endeavor.”

About SPP: Southwest Power Pool, Inc. manages the electric grid and wholesale energy market for the central United States. As a regional transmission organization, the nonprofit corporation is mandated by the Federal Energy Regulatory Commission to ensure reliable supplies of power, adequate transmission infrastructure and competitive wholesale electricity prices. Southwest Power Pool and its diverse group of member companies coordinate the flow of electricity across 66,000 miles of high-voltage transmission lines spanning 14 states. The company’s headquarters are in Little Rock, Arkansas. Learn more at www.spp.org.